Matushka Rossiya and the Balkans

This year will be extremely difficult for President Vladimir Putin. Economic recession is certain. Only its scale remains an open question. The deeper the recession, the greater the problems with the support of ordinary Russians for the regime. The Kremlin will have to focus on domestic challenges to a larger extent than before. Its room for maneuvers which be much smaller, for there is much less money in the treasury than a few years ago. On the other hand, by annexing the Crimea and invading the Ukraine President Putin has shown that for him, a former KGB man, attack is the best defense. And the most successful way of distracting the attention of public opinion from internal problems—at least for a while—could be finding an external enemy.

If Putin chooses an “escape forward,” the Balkans could become the next natural area of a “proxy war” with the West besides the Baltic Sea. Russia has a big potential for destabilization there. The primary target of Kremlin’s influence is the Republika Srpska in Bosnia, and then Serbia, Greece and Bulgaria. The importance of Russia should not be overestimated. Moscow is capable of making life harder for the EU, for example by slowing down the process of European integration of the region. But it stands no chance of becoming a credible alternative for the EU and to reverse the membership aspirations of the countries of the former Yugoslavia. Neither is Moscow able to persuade the pro-Russian EU members (for instance, Greece) to veto Brussels’ decisions which are unfavorable for Russia. At the end of the day, the position of Brussels (read: Berlin) is decisive. Unfortunately, Russia’s influence in Bosnia, the weakest link in the Balkans, is strong enough to engineer a crisis that would make it difficult for the Union to be equally involved in Eastern Europe, the most important region for Russia.

Historical Myth and Love for the People

Russia’s position in the Balkans is based on often underappreciated common historical heritage. Russia has managed to create an image—not always consistent with reality—of a protector of the Orthodox inhabitants of the Balkans, especially Slavs. This image is built in opposition to Turkey as a protector of Balkan Muslims. The problem is that in the past Russia often treated its Balkan religious or ethnic brothers instrumentally. The latter often do not want to remember about it.

Last year’s one hundredth anniversary of the breakout of World War I was another opportunity for Putin to present a Russian version of history addressed to the Balkans. According to Putin, Russia unlike the other great powers did not want this war, but it had to defend its Slavs brothers, the Serbs, attacked by Austria-Hungary. Consequently Russia waged a just war and not an imperialist one like Vienna or Berlin. Belgrade, in response, started to build a monument to Tsar Nicholas II within the hundredth anniversary of Russia’s and Serbia’s joint struggle.

At the end of October 2014, on the 70th anniversary of the liberation of Belgrade by the red Army and Tito’s partisans, the Serbian government organized a great parade in the capital, inviting Putin despite the objections of Brussels. It was the first military parade in Serbia since almost 30 years. Putin is the only foreign leader who received the highest Serbian official award. Serbian President Nikolić, who became famous thanks to his declaration that “there is only one thing he loves more than Serbia, namely Russia,” said to Putin when pinning the medal to his breast: “Please wear this as an expression of gratitude for everything that you and your nation did and are still doing so that Serbia could preserve its sovereignty and territorial integrity in freedom and peace and to achieve progress in every sphere of life.”

During the parade President Nikolić continued in the same lofty spirit: “Your participation is an honor for us, the symbol of our common great past, present and future. […] The Russian necropolis (of soldiers killed in battle) in the New Cemetery in Belgrade is a holy place for every inhabitant of the capital of Serbia, it is an expression of eternal gratitude of the inhabitants of my country for every private, non-commissioned officer and officer of the Russian army, who will remain forever in Serbia, for which he heroically gave his life.”

Putin responded in kind, declaring that “Russia and Serbia are united by a stable and continuous bond of brotherhood and friendship, which always was, is and will be the pride of our countries and nations.” Tens of thousands of Serbians listened to his speech, interrupted with shouts of “Putin, Putin” and “Russia, Russia.” For Putin it was not the first meeting with Serbs who are in love with him. In 2011 during his visit in Belgrade a friendly match was played between Crvena Zvezda and Zenit St. Petersburg, who share a common sponsor in the shape of Gazprom. Putin “honored” the match with his presence. As the Serbian press wrote later, he drove the fans to “delirious ecstasy.”

Mythologized history makes the Greeks and Serbs, and to a lesser extent Bulgarians, stand out in Europe in terms of attitudes towards Russia and President Putin. The myth is so strong that Russia does not need to spend big money on development aid and scholarships for students from these countries. The funds allocated by Moscow for these purposes are often ridiculously small. The myth of a friendly and caring Russia is the stronger the weaker is the knowledge about real Russia. Very few tourists from Balkan countries visit Russia. Few people in Serbia or Greece know Russian. But never mind. Opinion polls show that almost half of the Serbian population believe Russia to be the main donor of development aid for their country!

Moscow pursues a successful propaganda campaign reinforcing the mythical positive image of Russia. Russian organization Russkiy Mir (Russian World) and the International Foundation for the Unity of Orthodox Nations opened their offices in Serbia. Also active in Serbia are Russian foundations supporting local extreme right and eurosceptic organizations. There are also Serbian language versions of Russian websites, “selling” the Kremlin version of events. A very important instrument of Russia’s influence on the Orthodox societies in the Balkans is the Orthodox Church, often playing the role of the “Big Brother.”

For Moscow, the most important goal is a large public support for the development of cooperation with Russia as a partner perceived on equal terms with the European Union. For example more than half of the population of Serbia is equally supportive of cooperating with the EU and with Russia. Almost 30% Serbians see Russia as the most important partner in foreign policy, while the EU is seen like that only by 15% of the Serbian society. Moscow also exploits the fact that an overwhelming majority of Greeks and almost half of Bulgarians was against imposing sanctions on Russia. A large group of the latter has no opinion on this issue. Sympathy for Russia in Greece and especially in Serbia is combined with an antipathy for the US, which in the context of its confrontation with the West is for Moscow an excellent opportunity for reinforcing its influence among ordinary people.

An Economic Playmaker?

Russia is an important economic partner of the Balkan countries, but it stands no chance of replacing the EU in its role of a focus of attraction for the economies of Bulgaria, Greece or Serbia. Moreover, the position of Russia in the Balkans is weaker than of some of the EU members, for example Germany and Italy. Russia’s aspirations to strengthening its economic influence are increasingly relegated to the sphere of wishful thinking.

The geopolitical confrontation with the West and the economic crisis in Russia led Moscow to abandon the project of building the South Stream gas pipe through the Black Sea and the Balkans in late 2014. Announcing his decision during his visit in Turkey, Putin had not even bothered to warn the Balkan countries beforehand. He was unable to hide his fury. He blamed the fiasco of the project on Bulgaria, which in his view had not behaved as a sovereign state and succumbed to Brussels’ pressure contrary to its own interests. On the other hand Putin presented another great gas project, assuming the construction of a pipeline across the Black Sea to Turkey and then of a gas hub on the Turkish-Greek border. Putin did not explain how the belt-tightening Russia would find the huge amount of money needed for the project and in what way and whom he will involve in the EU. This project is even more virtual than the South Stream. It can be treated as a Potemkin village in the energy area.

Despite these obvious weaknesses of Russia, its economic influence in the region should not be ignored, especially in the energy sector. Russia is an important importer to Bulgaria, Greece and Serbia (10%-15%), it sells raw materials, especially natural gas, to the Balkan countries. In contrast, the importance of the Russian market for exports from Bulgaria or Greece is limited (1.5%-2.5%). The situation is better in the case of Serbia, with which Russia has signed a free trade agreement. Its exports to Russia are 7%. Belgrade hopes that by not joining the sanctions it will increase exports to Russia, but last year they stagnated and this year, because of the crisis in Russia, they will probably start to decline.

As recently as a few years ago Bulgaria and Greece hoped that Russian tourists—oligarchs and the middle class—would become an engine of development for the tourist sector in the light of the crisis in the Eurozone. And indeed in 2013 Russians constituted about 8% of foreign tourists in Bulgaria and Greece. Rich Russians also bought a lot of houses on the Bulgarian coast and on the Greek islands. But the economic crisis in Russia is turning the vision of Russian tourists vacationing in Varna or on the Rhodes in their mass into a pipedream. In the coming years their number will probably decline instead of increasing.

Russia is a relatively important investor in Bulgaria and Serbia (about 5% of all direct investment). It is worth remembering that in both countries there are also large investments registered in Cyprus, quite often truly originating in Russia. The Cyprus connection also plays an important role in the case of Greece, its economy being tightly connected with Cyprus. Russian investments in the Balkans are targeted mostly at the energy sector, which like in Russia is interwoven with politics. For example, Gazprom is the owner of the private energy company Naftna Industrija Srbije, the largest corporation in Serbia. Belgrade sold it at a much reduced price to Gazprom as a gift for Moscow’s support on the international stage in the context of Kosovo.

Even more striking links between politics and energy engineered by Russia in the Balkans can be seen in the Republika Srpska in Bosnia. It is in this country that Moscow has by far the greatest economic influence in the Balkans. Russia is unrivalled there as the most important investor and trade partner (almost exclusively imports). A key role in the economy is played by the oil refinery in Bosanski Brod controlled by Russian capital. The market of the Republika Srpska has a very small economic importance, but a large political one and it is no coincidence that Russia is so strongly present there.

Geopolitical Great Game

Russia treats the Balkans as an arena of its great game with the West, encompassing also the post-Soviet area and the Middle East. It is easiest for Russia to influence the countries waiting in line for EU membership—Serbia and the Republika Srpska in Bosnia. In no other part of the Balkans Russia can count on such big support of the political elite and society as in the Republika Srpska in Bosnia. After the annexation of the Crimea, President of the RS Milorad Dodik was waxing lyrical about Putin and said that Russia’s actions should be a model to follow by his country: the Republika Srpska should announce a referendum and unite with Serbia. Bosnia is a very loose federation, were the support of the Republika Srpska is a necessary condition for making any important decision regarding the whole country. Bosnia, just like Serbia, in March 2014 as the only Balkan country abstained from voting in the UN General Assembly when a resolution condemning the aggression of Russia in the Ukraine was adopted.

The Republika Srpska is the most serious challenge to the West in the Balkans. The RS is in theory part of Bosnia, but in recent years it has turned into Augean stables. State institutions are a bureaucratic Leviathan. According to the World Bank, even in the Ukraine it is easier to do business than in Bosnia. Corruption ceased to be part of the system, it has become a system in itself. Consequently Bosnia has found itself in a blind alley, at the end of the line for EU membership. The most important challenge is blocking reforms by the RS, which can count on the support of Russia in this context. The aim of the RS is showing that Bosnia is a failing state with no future and consequently leading to its breakup. Unfortunately, within the West there is no consensus about resolving this Gordian knot. Russia has a significant influence on the future of Bosnia as a permanent member of the UN Security Council. In November 2014, abstaining from voting in the Security Council on the matter of extending the EU mission in Bosnia, Russia sent a clear signal to the West that it is capable of hampering its progress in this country.

No major Serbian politician has dared to imitate Dodik in his unconditional support for Russia. But Moscow can count on Belgrade, which has a great debt of gratitude to Russia. Russia supports Serbia on the international arena in the context of Kosovo, still regarded by Belgrade as its province. On the other hand, Russian position is very inconsistent, for in recent years Moscow has radically undermined the principle of territorial integrity in Georgia and in Ukraine.

Serbia has not joined the EU sanctions against Moscow. Another emerging problem in the relations between the EU and Serbia is the question of the Serbian Russian agreement on visa-free travel, free trade agreement and cooperation in the energy sector. In all these early years Serbia will have to adapt to EU law and hence come into conflict with Moscow.

From Russian perspective a great asset of Serbia is its lack of interest in NATO membership, making it an exceptional case in the Balkans. This position enjoys a very strong support of the Serbian society, which since the Allied air strikes in 1999 is staunchly opposed to Serbian membership in the North-Atlantic Pact. Moreover, Serbia is working closely with Russia in the military sphere (the 2013 agreement). Already in 2011, a Regional Humanitarian Centre, where Russian engineers are stationed, was established in Serbia. Regular Russian-Serbian military maneuvers take place. As the only country from outside the former Soviet Union, Serbia joined the Russian-led Collective Security Treaty Organization as an observer.

The best antidote to the Russian interfering in the Balkans is EU membership of all countries of the region. Although Russia enjoys a large sympathy of the Greek and to a lesser extent Bulgarian society, neither Sofia nor Athens have played the role of Russian Trojan horses in the EU and they have accepted—although unwillingly, particularly Greece—the EU sanctions. The most important issue is making the continued process of the Serbian integration with the EU dependent on Belgrade’s unequivocal support for EU policy towards the Republic of Srpska in Bosnia. Unfortunately, the reliability of the EU pressure depends on the plausibility of the membership prospects, and these, given the rise of eurosceptic forces in the EU, may become increasingly distant.